Starting tracking positions in midstream mlps PSXP and MPLX. Very low relative distribution yields. Offset is that the stocks don't seem to have been severely affected by price of oil/gas. PSXP head seems to believe he can raise the distribution for several years out.
I'm finally a little more comfortable at tax time dealing with mlp's in a tax-deferred account (re UBTI) after a few years of having mlps there. As of right now, I'll take the small distribution yield and a chance for dividend appreciation in return for taking a small reduction in my cash position. I assume there isn't going to be much capital appreciation in the short run (1-2 years) as there might be seen with mlps that investors like in o/g that have high yields and if not more risk, maybe lots more volatility. Something about a mindset for me, which I can't quite articulate: In past, if I've bought an mlp for its yield 8, 10 or 12%, and the stock drops 15% or something more, I get grouchy that, cripes, I've lost a year's distribution equivalent, and a prime reason I had bought the stock, and so my reason for buying seems gone, and I want out (sell). However with low yielding stocks (maybe with these mlps) if they drop say 10% or more, I've not bought for the current yield, which has now gone up with the stock drop. So I'm interested in buying more, not selling.
finance.yahoo.com
news.investors.com
from MPLX 2/9/15 transcript:
MPLX has provided distribution increases in each of the eight quarters since IPO, representing a compound annual growth rate of 20.7% over the minimum quarterly distribution. And MPLX second full year as a publicly traded partnership, we have reaffirmed our commitment to our unitholders by announcing plans to substantially accelerate the growth of the partnership...We also expect earnings from this accelerated growth to support an average annual distribution growth rate in the mid-20% range over the next 5 years.
I'll also reenter Tortoise Energy Infrastructure, TYG, here for a few shares. Possibly a short-term trade.
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